A CEO’s confession to staff: ‘You’ll earn more somewhere else’

by
HRM |
05 Mar 2014

When candidates join the team at web development company Lunar Logic, they know their salary isn’t at the very top of the range – not because a salary comparison site told them, but because their boss did.

“I openly say every person in our company can earn more somewhere else,” says CEO Pawel Brodzinski. “I tell that explicitly to people because it’s truth. If I told them something else… they’d think I’m stupid.”

Instead of luring them with excessive salaries, Brodzinski asks them to lay their expectations on the table. And instead of negotiating, he simply meets it, as long as it’s reasonable. The unusual strategy, he says, has not resulted in a single person leaving because of compensation.

People won’t leave because of money “as long as they get what they feel they should be getting,” says Brodzinski. “They leave because there’s all sorts of unhappiness or unaddressed needs.”

Recently, a Towers Watson study on employers in European nations revealed no correlation between real-wage increases and employee attrition at a professional level. For instance, Switzerland, Sweden, Italy and Portugal all experienced relatively high salary growth, but levels of employee attrition were mixed. It ties in to the Herzberg motivation theory, which highlights the idea that motivation is about more than just pay.

Indeed, Brodzinski’s personal situation echoes that sentiment. “Every single time I was changing jobs,” he says, “I was changing jobs for worse salary. I did that twice for significantly worse salary, one third worse or 40% worse.”

So it’s partly from first-hand experience that Brodzinski informs his management style, which balances the following principles:

Meet individual expectations If someone expects a certain salary and a company doesn’t value their worth the same way, they will be demotivated. Allowing salaries to be set by expectation will also meet individual needs: “You can take two identical people in terms of what value they give the company, but one person will have a mortgage and family and children, and one will be a young graduate, and their expectations will be different,” he says.

Be fair This balances out the ideal of meeting expectations and prevents any extreme discrepancies between staff salaries. In prioritising relative fairness of compensation, Brodzinski says, “I want to feel that if I publish a salary list no one would come to me and say ‘that’s not fair’.”